Dr. Elliot Eisenberg
An economic impact study conducted by the National Association of Home Builders (NAHB) Housing Policy Department shows that New Hampshire’s home building industry not only pays for itself, its economic impact results in new income and jobs for New Hampshire citizens and additional revenue for local governments.
Every representative 1,000 single-family and 250 multifamily homes that were built across the State of New Hampshire in 2010 will generate a cumulative $249.3 million in revenue, compared to $184.9 million in costs over the next 15 years. By the end of the first year the housing industry’s economic impacts not only more than offset the fiscal costs resulting in a fiscal surplus to local governments, but the fiscal surpluses generated are more than enough to pay off all debt and result in a surplus available to pay for additional government services. Single-family and multifamily housing produces a net income to state and local governments of $8,806,600 the first year and $3,969,700 each and every year thereafter.
“These results show that home building is more than paying its own way and should put to rest the notion that existing home owners are subsidizing new home construction here in New Hampshire,” said Dr. Elliot Eisenberg, the Senior Economist who conducted the analysis of the impact of home building in the State of New Hampshire. “This is an excellent result and tells me that local residents should be thanking the building industry for footing the bill for a lot of town, city and state services.”
The economic impact study looks at the impact of the construction industry in three phases: the construction phase; the ripple effect; and, the occupancy phase. The impact of the three phases are added up, and then compared to the cost of services such as education, fire, police, utilities, parks and recreation and roads that are required to support the new housing units.
During the construction phase, the building of every 1,000 single-family and every 250 multifamily homes creates 2,222 jobs (1,537 jobs in construction alone), generates $13.2 million in local taxes and $154.7 million of local income in the first year. The ripple effect of those homes, which includes the wages and profits local area residents earn during the construction period that are spent on other local goods and services, results in 1,205 jobs, $14.4 million in local taxes and $77.9 million in local income, also in the first year. The ongoing annual effect of those homes, which includes local jobs, income and taxes generated as a result of the home being occupied, is 728 jobs, $15.3 million in local taxes and $45.1 million in local income per year.
“It is important for us to look closely at these numbers,” said HBRANH President Roger Demanche, Jr. “We’ve been saying for a long time that local home builders are doing their part to build community, and these numbers show that we are a very important player in the overall economic health of our state economy.”
The NAHB model used to determine the economic impact of the housing industry was first developed by NAHB in 1997 and has been applied to construction in more than 650 areas of the country. This study looked at economic impact of collectively building 1,000 average priced single–family homes and 250 multifamily homes across the State of New Hampshire. Complete copies of the study are available by contacting the HBRANH at (609) 228-0351.